Small_Business_Questions.pdf

Small Business

Q: Size of task orders, given sb set-aside, and some work anticipated will require higher technical skills, will it be sized for the prime to conduct 50% of the work? How is small going to do 50% of the work on a very large task order?

A: FAR Clause 52.219-14, Limitations on Subcontracting, will be reported at the prime contract level. The average annual value of a USAMS II task order is $1.5 Million. Small Business capabilities provided to date have been evaluated as capable of performing the USAMS requirements.

Q: You mentioned in the brief about the law change. In general we had heard that, but not quite in the way that you explained. Please elaborate on the small business percentage and dollar values. Is it at the task order level? Travel as well?

A: This answer is a deviation from the original guidance given at the industry day event and the one-on-ones that followed.

2013 NDAA; sections 1651 & 1652 did change but the CFR and FAR has not changed yet and are not expected to change prior to the USAMS III solicitation. The task orders issued under

USAMS are predominantly labor so the new calculations detailed in the 2013 NDAA; sections

1651 will not have a significant impact to calculating the 50%.

The current FAR calculation for 50% is how the USAMS III contract will be managed, FAR

52.219-14

The 50% will be assessed at the prime contract level vs. the individual task order level.

The Government mentioned that certain small business categories would have exceptions that allow firms of the same category to collectively or aggregately count toward the 50% (ex.

SDVOSB or HUBZone). That statement was not correct.

Because USAMS III is a Small Business Set-Aside and not a HUBZone or a SDVOSB Set-Aside the small business prime contractors have to accomplish at least 50% of the amount paid under the contract, as defined in FAR Clause 52.219.14.

If USAMS III was set-aside (or reserved awards for) HUBZone or a SDVOSB and used FAR

Clauses 52.219-3 or 52.219-27 then the CFR exceptions referenced during industry day would be correct.

The USAMS III RFP does not contain FAR Clauses 52.219-3 or 52.219-27.

Q: If a small business concern teamed with several small businesses and large businesses, would the prime be required to perform 50% of the work? Or, does the clause mean that the prime and its small business teammates would be required to perform 50% of the work and the prime could subcontract out 50% of the work to a large business concern?

A: The prime contract shall perform 50% of the work. The prime contractor’s teammates/subcontractors could make up the other 50% of the work.

Q: Because this will be a small business set-aside contract, will the Prime small business be required to work 51% of the labor dollars or will that 51% be able to be spread across the smalls on the team?

Q: Does the 51% small business have to be performed by the prime, or can all the small business teammates total 51% of the effort?

Q: NDAA 2013 and changes to 50% rule: given that it is the law and how far it is down the road, do you anticipate any difficulties in applying the rule and allowing our small subs to get to the 50%?

A. The current FAR calculation for 50% is how the USAMS III contract will be managed, FAR

52.219-14.

If FAR Clause 52.219-14 changes throughout the life of the contract, then if required the

USAMS III IDIQs will update the clause and will manage reporting in accordance with the new clause language.

Q: Based on FAR changes and the time for those changes to be incorporated, do you foresee asking for a class deviation for the 50% rule? You anticipate that you will have some approach in the RFP, right?

A: No deviation will be requested. The current FAR calculation for 50% is how the USAMS III contract will be managed, FAR 52.219-14.

Q: What were the paragraphs you mentioned in the brief yesterday regarding the 50% rule?

A. 2013 NDAA; sections 1651 & 1652 did change but the CFR and FAR has not changed yet and are not expected to change prior to the USAMS III solicitation. The task orders issued under

Q: 50% labor for smalls, the timing of that decision on if other smalls can be counted in that 50% of labor may be the combination of smalls.

52.219-14. The Government mentioned that certain small business categories would have exceptions that allow firms of the same category to collectively or aggregately count toward the

50% (ex. SDVOSB or HUBZone). That statement was not correct.

Q: How does that apply to the JV effort where you have multiple small efforts, the small business percentages is spread across the % but has to be led by a sb?

A: A joint venture shall meet the same small business requirements as an independent company.

The joint venture will be the prime contractor or “concern” and shall report the personnel performing under that joint venture toward the 50% as outlined in FAR 52.219-14.

Q: 51% completed by the prime and then how do the other teammates play in to that?

When do you expect that decision?

Q: What role do you see the large business playing on the team? We’ve seen in the news issues where large businesses have been seen as behaving like the prime.

A. All prime contractors shall comply with the ostensible subcontracting rule. Any company found guilty of improper business practices and personal conflicts of interest are subject to suspension and disbarment.

Q: How does the SDVOSB affect the 50% rule?

A: The Government mentioned that certain small business categories would have exceptions that

Q: Does the contract require 50% small business at the task order level or at the overall contract level?

A: The 50% will be assessed at the overall contract level.

Q: How do you plan to evaluate the SB requirement for >50% performance? Will it be reported and tracked at some periodic rate? (e.g. quarterly, annually, etc.) Penalties for non-compliance?

A: Compliance in meeting the 50% requirement shall be reported every 6 months through contract CDRL A008. Contractors not meeting the 50% requirement are at risk of the Off-Ramp procedures, risk losing future option years and/or impacts to annual CPAR ratings. 2013 NDAA

Section 1652 allows for financial penalties.

Q: Will you implement or accept a Prime contractor who adheres to the changes in the

50% Rule as authorized in the 2013 NDAA?

Q: Discussion- The Small Business 51% Rule: We believe if the 51% rule is enforced so that the SB primes are required to receive all 51% of revenue that it will be detrimental to other SBs on the team and ultimately force a greater number of large business employees to re-badge to the SB prime. This will occur for two reasons. First, a majority of work on

USAMS II is currently held by LBs and the LBs are positioned to enforce fewer non-prime

SBs in an attempt to preserve as high a work share as possible on re-competed task orders.

They will attempt to preserve the remaining 40% for themselves. Also to earn work on a

USAMS III Prime team, a teammate must be able to WRITE to the requirements, as well as show insight into how to best reduce/avoid/mitigate risks. This is a reason why a SB

Prime often opts for a LB presence on their task orders. Because most current USAMS II

LB primes have multiple SB subs receiving the current standard 23% share, those SB subs who are not priming on USAMS III will be the ultimate losers unless they have a critical person on task required to win the bid. We are award of the shuffling of teams that is occurring for USAMS III, and the current SB subs who are not priming are the companies vulnerable to losing work share. Second, rebading can be reduced if the SB prime is not required to receive 51%. Some rebading will occur regardless, but it needs to be minimized because it is an emotional and costly event for the employee. Leaving the stability of one company and joining another is usually associated with a salary decrease, loss of vacation and sick leave, having to shift benefit providers (401K, medical, dental etc.), as well as losing vesting stock options. This result is foreseeable, avoidable and contradictory to the government’s stated interest in retention of a professional workforce.

If the 51% rule were applied so that all SBs on the team counted toward the 51% the SB prime would have more incentive and less excuse to deny other SBs on the team some share of work. The LBs on the team could choose to not “sacrifice” their SB subs in an attempt to preserve a 49% share. Some rebadging would occur but it would be minimized. Lastly, this approach would allow experience and past-performance for non-Prime USAMS III SBs, such that when the government competes “USAMS IV” or some other suitable, contract, non-Prime SB performance on USAMS III will have provided a “breeding environment’ to groom the next generation of potential SB Primes.

As well, how the 55 th

CONs measures the 51% in terms of by task order, by contract, by year, or by the second year would impact all of the above. If required by task order, then heavy rebadging would be forced immediately upon task order award for each contract.

There would be no flexibility, for example, to allow an employee to remain with a company and allow stock to vest and then perform a measured transition to the SB prime. If measured by the overall USAMS III IDIQ contract across all task orders, it would allow more flexibility for the SB prime and the LB subs to mix weight of effort across multiple task orders to produce less turmoil We recommend implementing the 51% rule so it is applied to include all SBs on the team, and that 51% be measured across the entire contract with overall percentage lower in year one and rising to 51% by end of year two.

Another option might be to implement contract level measurement and, if after a period of time this proves unattainable, implement “at the task order level” for the remainder of the contract. There is a natural decision point for this because of the no greater than 3 year

POP rule. Nearly all task orders will be re-competed at least once during the USAMS III

POP.

A: Application of FAR Clause 52.219-14 is mandatory. The current FAR calculation for 50% is how the USAMS III contract will be managed, FAR 52.219-14.

The current FAR Clause 52.219-14 does not allow for including all small business when calculating the 50%.

Compliance in meeting the 50% requirement shall be reported every 6 months through contract

CDRL A008. Contractors not meeting the 50% requirement are at risk of the Off-Ramp

Q: Are SDVOSB & HUB the only small business teammates that count towards the 51% requirement?

A. The Government mentioned that certain small business categories would have exceptions that

Q: Does the Government want large business participation or strictly small business and small subs?

A: The USAMS III RFP does not require any participation by large businesses. The USAMS III

RFP is set aside for small business and FAR Clause 52.219-14 requires small business prime contractors perform 50% of the work.

Q: 51% SB: Enforced at TO level or IDIQ level? Is it up to individual contractor to manage that?

A: The 50% will be assessed at the prime contract level vs. the individual task order level.

CDRL A008. Contractors not meeting the 50% requirement are at risk of the Off-Ramp

Q: We think that there should be a small business participation plan. We think that the

Gov’t is better served by having them compete for the 51% of the work - Subcontracting plans. We think that it is good to have the small businesses compete for the 49% that is left over so that they may survive in this environment. When do you measure that 51%?

A: Small business participations plans are not included in the USAMS III RFP. The 50% will be assessed at the prime contract level vs. the individual task order level. Compliance in meeting the

50% requirement shall be reported every 6 months through contract CDRL A008. Contractors not meeting the 50% requirement are at risk of the Off-Ramp procedures, risk losing future option years and/or impacts to annual CPAR ratings. 2013 NDAA Section 1652 allows for financial penalties.

Q: As Task Orders drop, will there be monitoring of stats for WOSB?

A: Small Business reporting will be conducted at the prime contractor level. If a WOSB prime contractor wins a task order the statics tied to that contract action will be reported through existing Government reporting tools. Prime contractors will not be required to submit subcontracting statics tied to small business subcontracting.

Q: What specifically changed on the small business reporting?

A: Small Business reporting does not affect the USAMS III RFP. USAMS III will report the

Prime IDIQ contract values of the successful Small Businesses and the task order values awarded to Small Business concerns throughout the USAMS III effective ordering period.

Q: Will there be subcontractor plan requirements and goals? Specifically, will Primes have a requirement to meet goals for SDVOSB, WOSB, HUBZone, SDB?

A: No, subcontractor participation plans will not be included in the USAMS III contract.

Q: Would the government please clarify the requirements of FAR 52.219-14, Limitations on Subcontracting?

FAR 52.219-14(c) (1) Services (except construction). At least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern.

Q: For a SB prime, as far as you monitoring that 51% will be doing that portion of work, will the smalls be reporting that? Will the larges have to submit anything to confirm those numbers?

A: It is the responsibility of the prime contractor to submit a report regarding the 50% rule.

CDRL A008. Contractors not meeting the 50% requirement are at risk of the Off-Ramp

Q: Are there subcontracting goals set for the categories that the small is not representing?

A: No, subcontractor participation plans will not be included in the USAMS III contract.

Q: Will there be hub-zone goals on the contract?

A: No

Q: Is there anything in the process of evaluation of proposals where the WOSB will be given a different weight? Do attributes such as 8A, WOSB, etc. play a role in the source selection process?

A: The USAMS III acquisition strategy does not apply any weighting system to Women Owned

Small Business (WOSB) or any other small business classification.

Q: Does the Gov’t intend on reserving any awards specifically for categories of the SB.

A: No.

Q: Does the Gov’t intend on reserving any awards for SDVOSBs?

Q: (Ref Small Business Discussions) Will there be specific socio-economic awards for

WOSB, HUBZone, 8(a), etc., at the overall contract award level?

Q: Would your acquisition strategy consider setting aside for VOSB?

Q: Socioeconomic rules: Do I understand it correctly that you do not intend to have any of the break downs of SB at the contract award? No subcontracting targets, correct? I would encourage some sort of measurement on the accountability of SB participation. Keeping those goals, etc.

A: None of the multiple awards for the USAMS III IDIQ will be reserved for any small business category and subcontractor participation plans will not be included in the USAMS III contract.

Q: Is there any possibility of sole-source under the ANC programs? ANC Alaskan Native

Corporations, etc.

Q: Concerned about a large business and large business taking all the work and leaving the very small businesses out of work. NDAA 13 changes. Do you have any other information on work share/small business goals? Any idea when you will find out how to apply the regulation?

The current FAR Clause 52.219-14 does not allow for including all small business when calculating the 50%.

2013 NDAA; sections 1651 & 1652 did change but the CFR and FAR has not changed yet and are not expected to change prior to the USAMS III solicitation. The task orders issued under

Q: Do you have any thoughts on joint ventures/opinions/how you would look at joint ventures?

A: Joint ventures are allowable. Seek professional legal advice if interested in creating a joint venture. Joint ventures shall be registered in System for Award Management (SAM).

https://www.sam.gov/portal/public/SAM/

Q: How will Limitations on Subcontracting be handled on USAMS III? Will it be on a task-by-task basis, on the total contract dollars of Year 1 or Year 5, or a hybrid approach?

CDRL A008. Contractors not meeting the 50% requirement are at risk of the Off-Ramp

Q: Will there be HUBZone goals on the contract? If so, that helps companies like ours present our efficiencies and professionals to the USSTRATOCM enterprise. Our rates will provide the best value possible.

A: No HUBZone goals.

Q: Will any be sole source under ANC programs? If yes, how many?

Q: Given this is a small business set-aside and that some work anticipated will require highly technical skills, do you anticipate that TOs will be sized to allow the prime to conduct 50% of the effort?

A: Task Order size will be based on mission requirements.

Q: Small Business Participation: The Government’s intent of including small business in this procurement will best be served by requiring a small business participation volume.

This volume should clearly detail how the Offeror intends to employ other Small

Businesses. This Small Business Team should also count towards fulfilling the 51% Small

Business requirement. This will maximize Small Business participation and allow greater participation across the socio-economic categories (i.e. HUBZone, 8a, Woman-Owned, Veteran-Owned, Service Disabled Veteran-Owned small businesses).

A: Subcontractor participation plans will not be included in the USAMS III contract.

Q: Recommend government explicitly state how small business goals will be evaluated.

Evaluate over life of IDIQ, not over task order, and definitely not just over initial award period.

https://www.sam.gov/portal/public/SAM/

A: Small business goals are not included in the USAMS III contract.

Q: Ostensible Rule: Is there really guidance on where that line is crossed? People who have no intention of acting like a shell but are perceived as such.

A: Recommend seeking legal advice and reviewing past Government decisions regarding the ostensible subcontracting rule.

Q: How will the Government determine whether a newly formed Joint Venture composed of two small businesses is a “responsible bidder” in accordance with the FAR? Similarly how will the Government assess past performance for the same J.V? (Excluding teammate

Past Performance).

A: If required the Government will work with the SBA to obtain certificates of competency and determinations of responsibility, FAR 19.6.

Past Performance submissions would be allowed by the companies forming the joint venture.

Example if Firm A and Firm B create a joint venture the Government will accept past performance documents from those Firms and assess them as part of the prime offerors response.

If required the Government will solicit the services of the Small Business Administration if assistance is needed in determining responsibility. A lot depends on how firms structure the joint venture. How a joint venture is structured will really determine how it gets reviewed.

Q: Are you meeting your hubzone goals at the 55 th

Q: Other than cost, why are you going down the SB path? Is it just because of cost?

A: Cost does not factor into the decision to set the USAMS III RFP aside to small business. The

Government issued a Sources Sought requesting contractors to submit capability packages.

Based on the information received from industry the Government identified more than two (2)

Small Businesses that could perform the work. FAR Part 19.5 describes the process in related to

Set-Asides for Small Business.

Q: Why did the acquisition strategy go to Small Business?

A: The Government issued a Sources Sought requesting contractors to submit capability packages. Based on the information received from industry the Government identified more than two (2) Small Businesses that could perform the work. FAR Part 19.5 describes the process in related to Set-Asides for Small Business.

Q: The move to SB set-aside…is it to get better pricing? Cost savings?

A: Cost does not factor into the decision to set the USAMS III RFP aside to small business. The

Government issued a Sources Sought requesting contractors to submit capability packages.

Based on the information received from industry the Government identified more than two (2)

Small Businesses that could perform the work. FAR Part 19.5 describes the process in related to

Set-Asides for Small Business.

Q: To mitigate a small business’s extreme dependency on a large company to qualify them which might in turn lend itself to less control, will the Government consider limiting the number of past performance citations a subcontractor can provide to the proposal to a maximum of 2-3 per single subcontractor.

A: The past performance citation requirements will remain unchanged. A prime small business must be capable of meeting the requirements set forth in the RFP. Each small business must ensure it does not violate the “ostensible subcontractor” rule set forth at 13 C.F.R. § 121.103.

Q: We are concerned that with Smalls saying that we can do this and bring the right people…execution risk if it is just based on a promise and not really demonstrating how to do it.

A: Each company will be evaluated on technical, past performance and cost.

Q: Are you concerned about going 100% small business or a risk that you are feeling towards the mission, etc?

A: There is performance risk with every acquisition. Market research indicates there are small businesses capable of performing the work.

Q: What mission critical areas do you see being put at risk by execution through small business teams?

A: There is performance risk with every acquisition. Market research indicates there are small businesses capable of performing the work.

Q: Recommend you consider adding a large business or two to reduce risk to the customer.

A: A separate pool for large businesses was considered, however the rule of two (2) would still apply at the task order level and all requirements would first go to the small businesses before a large business would have the opportunity to bid. It is not fair to large businesses to require the proposal effort to win at the IDIQ level when small business will have the first opportunity to propose on the task orders.

Q: Small Business: Thinking about ranking down from large to small business. 70% 50% and 30%. My suggestion is that in the transition phase; allow the small business percentage to gradually happen over the years. 1st year 70/30 large to small, 2nd year 60/40 large to small, etc. I am looking at the time period over which they must comply. I would suggest over the life and that they present a plan to you. Sort of like a phase-in period to lower your risk.

A: Compliance in meeting the 50% requirement shall be reported every 6 months through contract CDRL A008. Contractors not meeting the 50% requirement are at risk of the Off-Ramp

Q: Will this come out a SB set-aside?

A: USAMS III is designated as a small business set-aside.

Q: Substantial subcontractor role to make sure that any small business bidding prime is not only a pass through.

A: A prime small business must be capable of meeting the requirements set forth in the RFP.

Each small business must ensure it does not violate the “ostensible subcontractor” rule set forth at 13 C.F.R. § 121.103. 2013 NDAA Section 1652 allows for financial penalties.

Q: Do you know what the relationship is when you have a prime small that has a large sub?

They can protest the size standard when someone thinks that the large is just using the small as a puppet. Recommend look at the ostensible subcontracting. Look at the 7 test questions that they used to apply. One – did you write the proposal and prove that you wrote it? Two – prime should have its own program management - that you didn’t just hire the incumbents program manager to come in and be yours. Evaluation of the program management piece and how it reads: we are using company x’s processes, etc.

A: Good point, each small business must ensure it does not violate the “ostensible subcontractor” rule set forth at 13 C.F.R. § 121.103. 2013 NDAA Section 1652 allows for financial penalties.

Section M was updated to require prime contractors submit past performance related to program management and identify key personal at the IDIQ level. Reference Sections M 3.1.3.1.1 and M

3.2.2.2.

Q: If you had to direct a small company to another small company, who would you suggest?

A: The Government will not offer such direction.

Q: What steps has the government taken to prevent the occurrence of ‘ostensible contractors' with this procurement?

A: Each small business must ensure it does not violate the “ostensible subcontractor” rule set forth at 13 C.F.R. § 121.103. 2013 NDAA Section 1652 allows for financial penalties. Section M was updated to require prime contractors submit past performance related to program management and identify key personal at the IDIQ level. Reference Sections M 3.1.3.1.1 and M

3.2.2.2.

Q: Would you also please provide guidelines for a small business concern to form a partnership or joint venture to pursue this opportunity?

A: The government will evaluate the legal documentation of the partnership or joint venture.

Recommend reviewing information on the SBA website and seek professional legal counsel.

Q: Is there a min business size that you need? There are PP thresholds, but those relate to the 9 mission areas.

A: There is no minimum size standard. A prime small business must be capable of meeting the requirements set forth in the RFP. Each small business must ensure it does not violate the

“ostensible subcontractor” rule set forth at 13 C.F.R. § 121.103.

Q: As we are a hubzone, I do not see anything regarding meeting subcontracting goals. Are you going to put anything in there for subcontracting plan requirements?

Q: When you flip to SB, you only give 5-8 SB work and all of the other SB subcategories do not get the same shot as large companies are doing the backing up to the sub. The other companies in this area might not get the work if you continue not requiring Subcontracting goals. You will get the same companies that you have now, the same technical people, and the prices are not necessarily competitive.